Ey has increased its few multinational audit consumers in germany inspite of the high-profile collapse of wirecard that saw the firm dramatically criticised for failing to spot a 1.9bn fraud.
Since 2017, ey features doubled its market share of auditing for people in the countrys blue-chip dax list, according to analysis by consultancy lnendonk & hossenfelder. by 2021, for the first time, it has seven of the 30 dax-listed teams as audit consumers.
Among all of them are heavyweights like deutsche bank, volkswagen, siemens, munich re and deutsche telekom. ey additionally audits lufthansa and airbus, that are placed in the mid-cap mdax.
Historically, the company has had only three to four dax consumers.
Ey in recent years effectively established it self because the 3rd energy among german blue-chips a segment that was usually dominated by kpmg and pwc, said jrg hossenfelder, companion at lnendonk & hossenfelder.
Altering auditor is a complex and pricey process that takes many years in germany. but review and governance experts expect that fallout through the wirecard scandal will limit eys capability to attract even more consumers.
The company is now under investigation by germany review regulator apas and deals with lawsuits from wirecard people.
Its big four competing kpmg, in a private addendum to a special review of wirecard, discovered ey missed the opportunity to look more closely into suspected bookkeeping fraud in 2016.
The damage to eys reputation should be enormous, said hansrudi lenz, a teacher of accounting at wrzburg university.
Christian strenger, a corporate governance professional and previous head of asset supervisor dws, predicted ey will struggle towin new business.
After wirecard, supervisory boardswill find it difficult to argue in preference of the firm, he said.
Thus far, only dws and german lender commerzbank both detailed but not members of the dax said they will certainly drop ey as auditor. both businesses experienced huge losings in the wirecard collapse consequently they are considering suing ey.
Deutsche bank, which switched to ey in 2020 after more than 60 many years with kpmg, stated it will probably closely monitor all additional improvements and analyse their particular affect the lender.
Vw main economic officer frank witter told shareholders in september the groups session of ey after 70 years with pwc was according to a range process that takes several months and added your carmaker had no conclusions that will throw any doubt regarding the selection procedure.
Volkswagens auditing agreement has become the lucrative in the dax. the group paid pwc 19m for review work in 2019, including 33m for taxation consultancy as well as other services.
Dax-listed mtu aero engines, that has utilized ey since 2014, said this has no plans to alter auditor through to the end associated with 10-year term.
Mtus enterprize model is quite complex plus it needs considerable business expertise for auditors to work out their particular duties effortlessly and efficiently, the company said. we think about the present auditors at ey as skilled in that respect. mtus agm then followed this view in august.
Lufthansa stated it had no intends to change its auditor. siemens, ey and kpmg declined to comment.
Eys increasing prominence into the blue-chip audit marketplace has-been driven by three aspects, stated dirk hildebrandt, an unbiased cologne-based auditor: brand-new rules that oblige listed organizations to alter their particular auditor more often, intense pricing by ey and too little choice for multinational companies.
International companies need an auditor with an international network and connection with working with complex corporate structures. this degree of solution can typically only be provided by the top four firms of ey, deloitte, kpmg and pwc.